2012 a year of ups and downs for Norwich Hospital property

Thursday

Dec 27, 2012 at 12:01 AMDec 27, 2012 at 2:15 PM

What happened: Preston held two referendums on multi-million-dollar environmental loan packages for the former Norwich Hospital.

Taxpayers rejected an $8 million package negotiated with the state Department of Economic and Community Development 319-261 on Nov. 27 amid acrimony over Board of Finance actions. The board declined to endorse the measure and four of the six members campaigned publicly against it, raising the ire of First Selectman Robert Congdon and other loan supporters.

JAMES MOSHER

What happened: Preston held two referendums on multi-million-dollar environmental loan packages for the former Norwich Hospital.
Taxpayers rejected an $8 million package negotiated with the state Department of Economic and Community Development 319-261 on Nov. 27 amid acrimony over Board of Finance actions. The board declined to endorse the measure and four of the six members campaigned publicly against it, raising the ire of First Selectman Robert Congdon and other loan supporters.

The fallout: Board of Finance Chairman Robert Maurice resigned on the day of the referendum, upset by the actions of colleagues Andrew Bilodeau, Norman J. Gauthier, Gerald Grabarek, and Kenneth Zachem. Zachem, the board’s vice chairman, became acting chairman after Maurice’s departure.
The rejection also caused the loss of a $964,000 grant from the U.S. Economic Development Administration although the Board of Finance and the Preston Redevelopment Agency sought to keep the money through an extension. The agency, which oversees the 393-acre former hospital tract now called Preston Riverwalk, plans to reapply for the grant in March.

A new tactic: Zachem and agency Chairman Sean Nugent pledged closer cooperation, culminating with the Board of Finance voting 4-1 on Dec. 6 to back a $4 million package with the same 20-year terms including interest rate structure. The $4 million package, which includes a $2 million town matching component, was approved by voters 304-251 on Dec. 18. The approval voided the possibility of losing the loan terms since the arrangement with the state, negotiated by agency Vice Chairman James Bell, was due to expire Jan. 1.

Looking forward: The Board of Finance authorized the agency to seek another $4 million at some future date, but Zachem said developers are needed first to gain support for that extra money. The cleaner the property the more developers will be interested, Nugent said.
No development agreements have been finalized since Preston bought the land from the state in 2009 for $1.